Abu Dhabi – Mubasher: Emirates Global Aluminium (EGA), one of the world's top five producers, on Monday posted a 64% year-on-year profit drop for the full-year 2018 with strong operational performance amid challenging market conditions.
Net profits recorded AED 1.2 billion in 2018, compared to AED 3.3 billion in 2017, the UAE's largest industrial company outside oil and gas said in a statement.
The 2018 profit drop was ascribed to higher raw material prices.
“This year once they are online, both the refinery and mine you will start to see some of the cost savings and implications coming into our bottom line,” Danny Dweik, the chief financial officer of EGA, told The National.
Revenue of the UAE’s biggest industrial company outside the oil and gas sector increased by 14% to AED 23.5 billion ($6.4 billion) during the 12-month period ended December, from AED 20.5 billion ($5.6 billion) in 2017, the statement showed.
The increase in revenues was driven by higher sales volume, growing benchmark price and product premiums and higher volume of value-added products.
“EGA’s exposure to raw material market prices will be reduced significantly once EGA’s alumina refinery in Abu Dhabi and bauxite mining project in the Republic of Guinea start-up and reach full production,” the statement highlighted.
Currently, EGA is building a $3.3 billion alumina refinery in Abu Dhabi, in addition to investing up to $1.4 billion in a mining project in Guinea, which is expected to open during the first half of 2019.
The mine will produce around 12 million tonnes a year of bauxite and will also sell the ore to third-party customers globally, creating a new revenue stream for EGA and a hedge for the company's purchases of bauxite for Al Taweelah alumina refinery.
This comes along with the company’s strategy to control all parts of the value chain, reduce costs and secure raw materials for its aluminium production.
It is worth noting that EGA produces 4% of global aluminium output.
